The Honest Company reached unicorn status in 2015. A billion dollars valuation does not insulate a startup from difficulty – even successful companies have their ups and downs. After the early rocketing, The Honest Company unfortunately ended up free falling around 2017 with many product qualities issues, dipping below the $1 billion valuation unicorn cutoff.
Yet as of today, the company is back on the upswing and having a resurgence of late-life success. We will take a look at how The Honest Company’s explosive growth has shaped their product offerings, how their hardships helped refocus the company mission, and what they are doing now to regain a foothold in this popular market. However, let us first start with its inspiring founding story and how a woman positioning herself in an ideally product with three other male co-founders?
Jessica Alba to Turn a Desperate Moment into A Successful Business
It was the spring of 2008, Alba was pregnant her first daughter, Honor – with husband and father Cash Warren, a Yale graduate and tech investor – and came a baby shower thrown by her family and friends where she received a ton of new baby products. Later the night, when she has the baby clothes washed with the special baby detergent her mother insisted to be good, just to have her hands broke out in rashes and hives. “I was thinking, what if my baby has a reaction and I don’t know? What if her throat is closing?” The mom had all this anxiety and fear for her early days as a child who had always been sick.
She could not imagine what a potential harm it is on a child, if a detergent marketed for babies could gave an adult such severe allergic reactions. That night she Googled every ingredient and discovered that some toxins can be labeled as “fragrance.” To have all the answered, research on Google obviously was not enough for Alba, she insisted to have epidemiologist Dr. Philip J. Landrigan on the problem. After that Alba learned in the last three decades under the Toxic Substances Control Act – which had not been reformed since being issued in 1976 – more than 80,000 potentially harmful chemicals were introduced in the United States without being tested. At the time, only 11 of these were banned.
In 2011, she appeared on Capitol Hill to ask members of Congress to co-sponsor the Safe Chemicals Act, with an aim to raise awareness and safety of consumer products.
No matter which legislator she spoke with, she was met with frustration. “They turned it into an are you a Liberal, are you a Republican, what side are you on? – situation,” she recalls. Congressmen disregarded her “I’m on the human side” response.
So, how about she herself creates the solution and the mission was clear: “I wanted safe and effective consumer products that were beautifully designed, accessibly priced, and easy to get.” Great idea, yet it still quite a distant from ideas to real businesses!
First off, Alba hired author of the book ‘Healthy Child Healthy World’ Christopher Gavigan who has devoted most of his time to addresses the numerous toxins that children are exposed to in typical household products on a daily basis – to consult on Love & Honor, the original name of her company. Meanwhile, she continues to have this topic studied in a broader orbit – and discovered that the FDA (Food and Drug Administration) in the US has ridiculously banned less than a dozen harmful chemicals, considering that in Europe more than 1,300 chemicals are deemed unsafe for household products.
By the time Alba had a second daughter, Haven, her company was still not off the ground. Her husband introduced her to his childhood pal Brian Lee, a start-up entrepreneur who co-founded LegalZoom.com (which was sold to Permira, an investment firm, for $200 million in 2014). He passed on her idea. And even the other two potential investor deals fell through as well, yet Alba was audacious “Actresses are used to rejection” she explained.
Eighteen months later Lee had a baby of his own, and when his wife started manically researching their household cleaners, he saw a need in the marketplace. By then Alba had refined her concept and changed the company name to Honest. “In the time between the first and second meeting, my wife had changed our whole life. Jessica’s goal to make safer products for the family resonated with me.” Finally convinced, Lee brought on Sean Kane from PriceGrabber.com to be the president and co-founder, and, with Alba and Gavigan, Honest’s own Fantastic Four – of an idealist, a toxicologist, a tech guru and finally a businessperson – was formed. “We are a mission business,” Lee says. “Our mission is to make safer homes for everyone.”
However, to be the only woman with an idea, how does Alba manage to balance out with other three male co-founders?
When being ask by Poppy Harlow on the CNN Boss Files: Is it sad that people think you have to have a man by your side to really took off the idea? Alba have it naturally that Gavigan or Lee to her is not like to have men along but rather the experts – or people from the same idealistic village that want to make this one big dream comes true. Alba shared that when people first heard her idea and she first decided to pitch it with Brain Lee, it was all condescending nods and good-luck-pads on the shoulders she received – which is not much different from the time she wanted to be an actress. However, the entrepreneur claims it only toughens her up and makes her even more determined. It is the moment when people do not believe in you or be able to see your true values that you could learn more about yourself, what you are capable of – just by yourself, against all the odds and without the whole cheerleading team to back you up!
Obviously, it takes a lot to really trust your gut and continue to nurture that same belief for the rest of your life because that is the only way to bring into life a real in-need-business. In the case of The Honest Company, Alba has to do it with the other three talented co-founders, and it’s not easy for her to be the only woman in the board room – shared Alba. Because except from Alba, it also has to be their ideas included, they needed their perspectives to be embraced so the company could take on. And this took her about three years to really gain back the narrative end of control over the vision of the company as well as the strategies of where it is needed to head, and another two more years after that to really assert her position.
There are two things Alba said she learned as a woman of business started out actress, first ‘ask for help and learn how to ask for help’ and second ‘be okay with criticism.’
In 2012, the company’s first year, sales reached $10 million, only 17 products of the diapers-and-wipes category all delivered to subscribers” homes on a monthly basis. She sparked life into a company that reached up to a $1.7 billion valuation in 2015, a company that amidst the 2020 global pandemic saw a 32% rise in sales since early March. Even though skepticism on whether Alba is just representing as a face of the company to gain public trust – still abound. But for those of us who know how she started The Honest Company, let’s take away an inspiring story that reminds us that hard work is damn hard -and it is inevitably accompanied by rejections – but hand in hand with a mission-driven mindset it eventually pays off.
Keys Take Away from The Honest Company’s Journey of Rise and Fall
The Honest Company journey is a popular example of what a unicorn company could turn out to be. Forgetting its culture and mission along the way to buckled down on what made it a successful company in the first place. However, it was able the comeback and is seeing renewed growth. here are a few lessons from its journey.
#1 Unicorns are rare for a reason
Since the beginning, it was all down to the message the company wish to deliver. Which is on building its brand around the idea that childcare products should be safe, affordable, and eco-friendly – and this became the company’s guiding manifesto, called the Honest Standard.
Alba and her team were also focus on building a community of social media followers that appreciated the company’s mission, which movement has not only stiffened The Honest Company’s image, but instead it also gave them a way to invest more capital on products. Alba’s association meant that she was able to leverage her then five million social media followers to promote the brand. As an already outspoken advocate for natural and ethical childcare products, Alba could easily connect with her audience as an authority.
Unicorns are beasts that made up of ideals and special circumstances – that’s how the spell works. Having the over $1 billion dollars valuation that makes you a unicorn might not last, it’s important to concentrate on the things that made your company successful in the beginning. Focus on growth and a providing value to customers.
#2 Adhere to your mission
As Honest grew, the company expanded its line with several new lifestyle and home markets. However, this considered a shift from their original focus on organic baby and beauty care items and ended up causing difficulty when some core products suffered.
Till 2017, the company finally hit many messy snags, including a voluntary recall of its baby wipes, a report ingredient-labeling issue, and a class-action lawsuit over the ingredients used in some products. With this mess not only cost The Honest Company a huge amount of money but worse is that it is hurting the company image and what it has represent since the first day.
So, the point here is to never forget what your company set out to do. For falling behind their promise, the Honest feel short of its audience’s expectations, and suffered losses because of it.
#3 Quality assurance is principle
In pursuit to comeback the Honest company sure needs to make changes in order to survive. By losing focus on quality control of their core products, the company turn away its audience who was concerned with safety and eco-friendliness. After all, the Honest company decided to fix this by bringing research and development, of course, along with quality assurance. Which meant that Alba and her company would have the complete oversight on the manufacture of their product, they would do their own formulas in-house, and then have the manufacturer to make it at scale.
When you offer a mission-based product, any perceived dip in quality could mean disaster. So, try to stick up and solidify your brand mission and ideas, by making sure that every product you offer is always of the highest quality and aligns with the former. And in this case, concentrating on what its customers associated with the brand in the first place helps to set stage for what looks like a comeback for The Honest Company.
#4 Do not offer more than you can handle
Expanding into new markets, or offering new products, is a great way to grow your business, but it’s more difficult than optimizing your current ones. As you are bringing up the company, it is crucial to make sure that every product you offer, new and old, maintain the same quality or only getting better but not in vice versa.
#5 Course correct when you need to
To step back and assess your failure constantly is never too much. While growing, it is inevitable that your company will change, and teams will need to have the right angel – aligned perspective to move in the right direction.
The Bottom Lines
Jesssica Alba’s story sure is an inspiring one where her passion to solve the problem wins over just with the only skill of “asking” and Alba has her way straight up from actress to billion dollars entrepreneur.
Alongside, with the fall and rise of The Honest Company we are seeing an obvious example of the struggle where most startups stumbled into, some are soon able to recognize and found their way back, others just get lost and forgot themselves along the way. In a competitive market, customers have lots of choices. Your brand is your promise which you could never afford to break.